Promoting Innovation in Public Procurement



Policy areas

Organisation name Federal Ministry of Science, Research and Economy (BMWFW)

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Contact person: Bernd Zimmer

In the second half of the first decade of 2000 there was already a well-developed system of public research funding in Austria with relatively high research investments. As a result, Austrian companies were increasingly able to produce more technologically advanced products. However, this offer of high-quality products has not been exhausted by public authorities (ministries, federal provinces, public companies, etc.). The public sector did not sufficiently promote the procurement of innovative, efficient and environmentally friendly products. While the research activities have provided innovative and eco-efficient products at Austrian companies, these products have not been able to exert their positive effects on the environment and society because they have not been adequately procured by the public sector. There was hardly anyone who would have helped public procurers to better evaluate and finally buy innovative products.

In several studies, the Federal Ministry of Science, Research and Economy (Bundesministerium für Wissenschaft, Forschung und Wirtschaft – BMWFW) and the Federal Ministry for Transport, Innovation and Technology (Bundesministerium für Verkehr, Innovation und Technologie – BMVIT) have identified the great potential of public procurement as a demand-side innovation policy instrument. To this end, in September 2012 the Austrian Federal Government adopted the Austrian Action Plan on Public Procurement Promoting Innovation (PPPI). The main objective of the PPPI initiative (and its crucial tool, the PPPI Service Centre) is the stimulation of innovation as a contribution to the solution of societal challenges and the strengthening of Austria’s competitiveness. This applies in principle to all areas of public administration on the one hand and to all innovations in products and services on the other. With the implementation of PPPI, the use of further developments in the public sector is intensified to provide citizens with a sustainable, efficient and effective range of public services. This allows the modernisation of public administration in general and specifically its infrastructure (transport and network infrastructure) taking into account future needs and impacts on future generations.

The PPPI Action Plan is well embedded. First, the Action Plan is linked to the Austrian Strategy for Research, Technology and Innovation. Second, its formulation is the result of a participatory PPPI Strategy Process, involving all relevant Austrian stakeholders. Third, its content and realisation is politically legitimised by government decisions. The responsibility for the PPPI Strategy Process as well as the ongoing implementation of the PPPI Action Plan (i.e. the PPPI initiative) lies cooperatively with the BMWFW and the BMVIT; supported by the Federal Procurement Agency (Bundesbeschaffung GmbH – BBG) and the Austrian Institute of Technology (AIT).

The PPPI Action Plan contains a project plan with a mix of measures. The corresponding milestones have so far been achieved as follows:

  • Strategic dimension (‘soft law’): political commitment to the introduction of innovation procurement in public entities and dedication of budgets (for pilots, services etc.) and integration of innovation needs of public procurers in existing programmes;
  • Operative dimension (state aid and procurement): establishment of a PPPI service network consisting of the central PPPI Service Centre, PPPI centres of competence and PPPI contact points;
  • Legislative dimension (‘hard law’): amending the Federal Procurement Law to include innovation as an explicit objective (carried out in July 2013);
  • Impact dimension: establishment of PPPI monitoring and benchmark systems.

The first phase of the monitoring system has already been implemented by Statistics Austria and the overall evaluation of the PPPI initiative took place during 2017 (results at the beginning of 2018).

In November 2016, the Austrian Council of Ministers agreed upon investing a total amount of EUR 10 million over the years 2018 to 2021 to further increase the impact of PPPI measures. Existing approaches will be continued and refined (e.g. broadening the scope of PPPI competitions, developing a dedicated training course for public procurers) and additional measures will be developed (including the support of pilot projects using the new procurement procedure ‘innovation partnership’). Besides that, the PPPI initiative has been nominated for the Austrian Public Sector Award 2016 and the PPPI online platform was nominated for the Austrian Public Sector Award 2017. These nominations underline and strengthen the role of the PPPI initiative as a driver of public sector innovation in Austria.

The PPPI initiative leads to a win-win situation, because all governmental levels and many stakeholders are involved in a structured manner. Synergy effects can be lifted by cooperation, there are low ‘fresh money’ costs, no new institutions are created and the entire project is accompanied scientifically. These factors and the achievements of the PPPI initiative so far have been recognised at EU and OECD level, resulting in the Austrian PPPI initiative being seen as a role model for the use of public procurement as a driver of innovation.

The transferability of the PPPI service network (including in particular the services provided by the PPPI Service Centre) at national, regional or local level within Europe is possible and desirable. The examples of good practices arising in the PPPI initiative are designed to enable a wide range of actors and different levels of public administration to learn from each other and with each other.

The PPPI Service Centre as a cornerstone of the PPPI initiative and its service network provides a whole bundle of services to public authorities in Austria. These include tailored support in strategic and operative issues regarding PPPI, specific incentives stimulating PPPI, training and development as well as PPPI events. Furthermore, it initiates PPPI pilot projects via PPPI project competitions and it has established a PPPI online platform (see to enable a dialogue between public procurers and innovative companies.

The PPPI services provided can be applied and implemented in numerous fields and areas. For example, public buildings can be built as low-energy buildings with innovations such as higher insulation capacities and active energy faсades with solar and photovoltaic plants. All these measures reduce energy costs and environmental pollution. Administrative processes can also be speeded up by intelligent information and communication technologies, such as e-government or e-procurement, which makes them more cost-effective and more customer-friendly for the citizens and the public in general.

The following lessons learnt can be derived from the diverse activities carried out:

  • There is strong agreement to PPPI networking events focusing on specific topics such as lighting or mobility.
  • Numerous stakeholders have to be analysed and targeted specifically.
  • Financial resources for PPPI are limited.
  • Procurement per se is risk-averse.
  • The political support for the PPPI initiative is important so that innovative products and services are truly procured.

The services offered by the PPPI Service Centre are designed in such a way that, from an operational perspective, it is also possible to transfer them into other countries in Europe. A scaling of the PPPI online platform is possible and so far is technically prepared. The thematic diversification of the platform is also conceivable, since ecology and social innovation are topics that are strongly promoted by the European Union. The politics could strengthen its self-commitment to PPPI at various levels (EU, federal government, federal provinces, municipalities, public companies) and strengthen the PPPI support measures.

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